growing great 2015 Review of Seven by Seven objectives Situation analysis Mega trends Country analysis Competition in the oils and fats market place Expanding canola production and markets 2015 goals Numerical targets Plan of action Mission statement

Accomplishing our Seven by Seven objectives By 2002, three consecutive years of declining acreage & production Low returns across the supply chain Commoditization of canola and questions about our future

Accomplishing our Seven by Seven objectives Retain critical mass of acres to ensure continued investment in the crop Generate higher returns per acre relative to other crops Build high value demand for canola (NA focus)

Accomplishing our Seven by Seven objectives Hybrids, introduction of high stability canola oil, global biodiesel demand, were responsible for our success

Mega Trends “In its 2007 presentation to the Agricore United Annual General Meeting, Rabobank estimated that world usage of the major oils would grow from 96 million tonnes in 2005 to 125 million tonnes in This 29 million tonne increase is projected to be split between food and fuel, 13 and 16 million tonnes respectively.”

Biodiesel Biodiesel is a global phenomenon Drivers: environment, energy security, agricultural renewal and economic development Government intervention a key feature of this segment

Food Demand Global income growth will trigger increased demand for vegetable oils and movement toward healthier fats Rapid growth in oils and fats demand will favour canola’s high oil content Market dynamics specific to each of canola’s major customers will continue as dominant feature of demand

North America US and Canadian food market mature and demand stable Obesity, chronic disease and trans-fat creating bias in canola’s favour Real growth opportunity lies in food service and food processing Emergent renewable industry will play a dominant role in global oils and fats growth and we will need to watch: policy environment, meal demand, changes in production patterns, etc. Higher standards of living in Mexico creating opportunity for differentiation of canola oil and meal

Asia Japanese market is mature but consolidation, meal surplus and innovative retail marketing approaches are helping to sustain market Depth of cut to Japanese oil tariff may impact canola seed demand China is and probably will remain a challenging market but will be a worthy of further development. South Korea is not a significant buyer but the upcoming FTA may create environment for growth Pakistan a committed canola buyer and recent circumstances have created demand for Canadian origination

The EU Due to long-term anti-GM sentiment, biodiesel, rather than food market, will dictate demand Market will remain challenging for Canada due to NTB’s and potential for FSU supply There will be opportunity for seed and oil sales EU biodiesel policy will be a critical component of overall global demand

New Geographic Market Opportunities India, Egypt, and Taiwan have been flagged for market development Focus on countries that meet specific value-based criteria and have functioning regulatory systems Keep a watch on new opportunities as focused approach also creates vulnerability

Competition in the Oils and Fats Market Place Major competitors are: soybean, palm, canola/rapeseed in other geographies, sunflower and corn All are focused on growth to meet mega market trends As good as canola is today, we must be mindful of competitor activity Challenge from soy will be sheer size of R&D investment to improve consumer, processor, agronomic traits Palm will compete with us in global biodiesel market but food market opportunity could also be affected. In both segments, palm will have advantageous tariffs (if any at all) Potential for increased production of canola/rapeseed in other geographies such as Australia, the US, EU, Ukraine and the FSU, even SA Sunflower and corn oil are not significant at the moment but corn oil could become more relevant given ethanol production

Competition in the Oils and Fats Market Place N ear to medium term, oil demand will drive the commodity market and demand for specific functionalities will offer the Canadian canola industry an exciting opportunity to accelerate its growth relative to other commodities Long-term, as competitor products expend significant resources in research and development it will be necessary for the industry to continue to innovate

Expanding Canola Production Competition for Acres No macro changes for cereals & special crops that would significantly reduce canola’s attractiveness Items to monitor include: CWB policy change; movement away from KVD; ethanol demand and/or weather- related cereals shortage that would impact price Question is important for canola industry but increasingly for the entire grains and oilseed sector

Expanding Canola Production Market is signally desire for more canola; how much can come from Canada?

Expanding Canola Markets Promote canola’s versatility, light taste and healthiness Develop canola biodiesel branding strategy capitalizing upon large volume, consistent quality, cold weather properties and environmental benefits Pursue an industrial use strategy based upon the biodiesel platform Eliminate tariff and non-tariff barriers to trade in key markets Focus on maximizing meal value

Goals for 2015 Element Target Production Acres Yield 9.1 million tonnes 13 million 32 bu/acre 15 million tonnes 30% increase (17 million) 35% increase (40.5 bu/acre) Oil content42.5% average45% average Classic to Designer Ratio 90/1075/25 Meal2000 kcals/kg energy content (poultry) 10% increase (90% of soybean meal energy level)

Goals for 2015 Element Target Export Seed Japan Mexico US EU Other (Pakistan, China, etc.) 5.2 million tonnes 2.00 million tonnes 1.20 million tonnes 0.50 million tonnes 0.00 million tonnes 1.50 million tonnes 7.5 million tonnes 2.00 million tonnes 1.50 million tonnes 1.00 million tonnes 2.00 million tonnes Domestic Crush Biodiesel (domestic) Biodiesel (export oil) Food (domestic & export) 3.7 million tonnes 0.05 million tonnes 0.25 million tonnes 3.40 million tonnes 7.5 million tonnes 2.00 million tonnes 0.50 million tonnes 5.00 million tonnes Biodiesel demand includes other non-food applications

Getting from Here to There Innovate across the value chain Adapt quickly to change Focus on markets that place value on canola’s specific attributes Build on our ability to contribute to improved consumer health and a better environment Continually monitor and measure performance

Mission Statement The Canadian canola industry…. Innovative. Resilient. Determined to create superior value and a healthier world.